|Continued focus on OPEC|
The announcement from OPEC of a headline cut to 32.5 million bpd for Q1-Q2 2017, which included production targets for members other than Nigeria, Libya, and Indonesia, will fail to deliver an actual OPEC production total of 32.5 million bpd for Q1 2017. More probable is a total around 33.0 million bpd. This will sharply reduce the pace of inventory accumulation in Q1 2017, but will not lead to inventory draws until Q2. Given the rock solid credibility of the Saudi/GCC portion of the cuts, this will clearly put a floor under prices and provide OPEC producers with some respite from their financial difficulties.